Rich is attending a 4 year college as a freshman he was approved for a 10 year federal unsubsized student loan in the amount of 7,900 at 4 29 he knows he has the option of beginning repayment of the loan in 4.5 years he also knows that during this non payment time interest will accure at 4.29 if rich decides to make no payments during the 4.5 years the interest will be capitalized at the end of that period what will the new principal be when he begins naking loan payments how much interest will he pay over the life of the loan

CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN:9780357110362
Author:Murphy
Publisher:Murphy
Chapter2: Income Tax Concepts
Section: Chapter Questions
Problem 37P
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Rich is attending a 4 year college as a freshman he was approved for a 10 year federal unsubsized student loan in the amount of 7,900 at 4 29 he knows he has the option of beginning repayment of the loan in 4.5 years he also knows that during this non payment time interest will accure at 4.29 if rich decides to make no payments during the 4.5 years the interest will be capitalized at the end of that period what will the new principal be when he begins naking loan payments how much interest will he pay over the life of the loan
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